NHS consolidation unlikely to bring savings

Almost 100% of NHS directors see the NHS merging andconsolidating in the next 12 to 18 months, but cost savings are an unlikelyby-product they believe.

The opinions come out of a Grant Thornton survey of around600 public sector directors and senior managers including those from the NHS,Foundation and Primary Care Trusts.

The survey revealed that 98% of NHS respondents – 47% of allrespondents – expect some form of consolidation to take place in the publicsector in the next 18 months with 61% of the NHS respondents saying costreduction will be a key opportunity driving this consolidation. Though theabolition of PCTs and Strategic Health authorities will also play a part.

Yet despite this view, only a quarter believe savings to belikely or extremely likely to materialise and only 13% said that mergers andconsolidation will be the greatest focus of savings and efficiencies over thenext year, meaning cost cutting will need to come more from within organisations.

“The inward focus of organisations may be the result of theneed to identify local solutions that are driven by commissioning arrangementsthat traditionally concentrate on a single organisation,” said Giles Newman,head of healthcare at Grant Thornton.

“While savings and efficiencies across the whole healthsector are undoubtedly the way forward, we expect the emphasis on localisationto be a theme over the next couple of years as the new commissioningarrangements with GP consortia and the NHS Commissioning Board are embedded andSHAs are wound up.”

The survey respondents identified other opportunities comingfrom a merger or consolidation, including 47% saying improved services forbeneficiaries, and 45% saying more strategic, smarter systems. Grant Thorntonbelieves these responses highlight a willingness of the NHS to work moreclosely with local authorities and the third sector to find cost-effectivesolutions to service design.

“The NHS needs to work differently in what will be effectivelya new market,” Newman said, “embracing patient choice, the emerging privatesector and innovative solutions with partner organisations such as localauthorities to find solutions that deliver the same or better care for lessmoney”.